Russia is developing a blockchain system to replace Swift
Russia appears to be circumventing the Swift ban by using blockchain technology.
Russia’s Rostec Group is a government organization that includes a number of technology companies. They have announced that they have developed a blockchain platform to launch a digital system for international payments that can replace the global Swift system.
Russian banks were excluded from the SWIFT system in February last year thanks to sanctions imposed by Western countries in response to the Russo-Ukrainian war. Since then, Moscow has sought to seek an alternative financial payment system to SWIFT to protect its foreign trade transactions.
The digital system for international payments will allow Russia to pay for imports in its national currency, the ruble, instead of the dollar. According to the Rostec group, the new system will also enable foreigners to pay for imports from Russia in their national currencies.
Blockchain and cryptocurrency storage
Rostec’s statement said that the blockchain platform on which the international payment system was developed, called CELLS, was developed by the Novosibirsk Institute of Software Systems (NIPS), which in turn is affiliated with the Rostec Group.
The platform is designed to offer an integrated system based on distributed ledger technology.
According to the Russian group, the platform includes among its key elements a digital system for making payments in the national currencies of the countries associated with it.
The company claims that the new system “can provide a real alternative to the international payment services offered by the SWIFT system,” from which Russian banks have been isolated under Western sanctions.
In addition to the international payment service, the CELLS platform gives its users the ability to create wallets to store digital currencies, according to the statement.
Russia promises secure transactions
Oleg Yevtushenko, CEO of Rostec Group, promised that the new international payment system will ensure “high-speed and secure transactions”, and said that the new digital system can perform around 100,000 transactions per second, with the possibility of doubling this number.
Yevtushenko also explained that the payment function in local national currencies offered by the new system will allow users to circumvent Western sanctions imposed on Russia.
The Rostec group targets large companies that have commercial relations with Russia, as well as foreign authorities that do business with Moscow, as well as financial institutions and banks.
Russia: The position of cryptocurrency has changed
The announcement of the new system comes a few days after the Russian government said it was considering using cryptocurrencies in international payments. In January last year, the Russian central bank had proposed banning the introduction and use of all cryptocurrencies.
There are discussions within the Russian government about the idea of using cryptocurrencies in international trade settlements, said Ivan Chepskov, head of the fiscal policy department of the Russian Ministry of Finance.
This is considered a shift in Russia’s position to cryptocurrencies, as the Russian central bank had warned earlier this year about the risk to the country’s financial system. It was claimed that crypto undermines the sovereignty of the country’s monetary policy.
On the other hand, the legal status of cryptocurrencies in Russia is changing, and previous attempts to legalize them have not yielded results. The government is pushing to allow them to attract foreign investment and get domestic trade out of the shadow of Western sanctions.
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